4 bed family-let
New Haven Terrace, Grimsby DN31 2RU
Project
Background
& Deal Structure
A 3 bedroom mid-terraced property requiring a light program of works, ideally suited as a 4 bedroom family-let and leased to a Registered Provider on a long-term commercial lease.
The Registered Provider (RP) Mears have expressed interest in this property, and it has passed their postcode checks.
The RP have offered a 5 year lease on this unit, following renovation and having onboarded the property.
Location
Images
Video Walkthrough
Floorplans
Project
Scope of Works
The renovation plan involves the following tasks: removing all carpets and floorings, kitchen doors, and glass in bedroom 1; eliminating polystyrene tiles/ceiling in the living room and reboarding and plastering the ceiling.
Additionally, stripping back to brick 1.5 meters high on one wall in the lounge and under the stairs.
Relevant walls will also be stripped, including the one with the window in bedroom 1, the wall being tanked and replastered in the lounge, and the chimney breast in the middle bedroom.
Note that walls with textured coverings requiring plaster will be fully stripped to ensure a smooth finish without irregular patches.
Furthermore, the plan includes installing smoke and heat detection systems with interlinked smoke detectors—one each in the kitchen, downstairs hallway, and corridor area.
A new consumer unit will be installed along with an Electrical Installation Condition Report (EICR) test.
All bedrooms will be equipped with two double sockets, and extraction fans will be installed in the kitchen and bathroom.
Supplying and fitting new fully compliant FD30 fire door casings, FD30 fire doors, intumescent fire strips, and fire door closers in both ends of the kitchen are part of the fire safety measures.
Fire-boarding under the stairs and around the consumer unit will also be carried out.
Then the walls repainted throughout.
Finally, the plan involves laying new carpeted flooring throughout the property
Financials
Acquisition Costs
| Purchase Price Sale agreed | £62,000 |
| Renovation Refurbishment & Conversion Costs | £9,225 |
| Furniture Furnishing to provider’s requirements | £2000 |
| SDLT Stamp Duty Land Tax | £1,860 UK £3,100 INT |
| Survey RICS Level 2 report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £1,500 |
| Sourcing Sourcing Fee | £5,000 |
| Capital In Total acquisition costs | £85,385 |
Optional Extras
| Project Management Coordinating contract teams | £2,500 |
| Lease Setup Lease negotiations & contract admin with Registered Provider | £800 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £70,000 |
| Uplift Between GDV and original purchase price | £8,000 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £52,500 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £32,885 |
Registered Provider 5 Year Lease
| Gross Rent p.a. Negotiated rate for area | £9,000 |
| Mortgage p.a. @6.00% lending @75%LTV | £3,150 |
| Operational Expenses p.a. @0.00% | £0 |
| Management p.a. 0.00% | £0 |
| Net Cash Flow p.a. Pre-tax income | £5,850 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £98,742 |
| Mortgage Lending 1st Charge lending redemption | £52,500 |
| Equity Investment Capital Capital returned to equity investor | £32,885 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £13,357 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £5,850 |
| Total Net Lifetime Cash Flow Net income over life of lease term | £58,502 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £71,859 |
Comparables
Availability
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This deal is available under our standard terms with a 25% downpayment of the Sourcing Fee paid to secure the opportunity, deductible from the final balance due at Exchange of contracts.
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